Many of us look at the Detroit automakers — General Motors, Ford, and Chrysler, with contempt. How could the execs of the respective companies drive them into the ditch the way they did? Failure is exclusive to American car makers, right?
Well, … uh… wrong. Everyone looks at Toyota as the model for the American automakers to follow out of their predicament and on to success. But wait. Toyota is experiencing its own problems.
Toyota sales and along with that it profits are plummeting and they are plummeting worldwide. The company has cut its profit forecasts by 70 percent for the current fiscal year. And, wait for this one, its credit rating has been downgraded. (Gasp! The apocalypse is upon us! Not.)
Sales of Toyotas in the U.S. in October fell 25.9 percent. The industrywide decline was 32 percent. And Wards forecasted Toyota’s November sales to dip drastically by 30 percent compared with last year.
Why is Toyota feeling the pinch? Because experts say that it has a lot of trucks, more trucks than its major competitor American Honda. Hey, wait! That sounds familiar. Oh, yeah, that’s one of the major bad decisions made by the execs of the American automakers. They concentrated too much on trucks.
Still, Toyota is in a great position to ride things out. It has a lot of cash and very little debt. It doesn’t need government loans. Still, it does have to do some cost cutting. But the company is looking ahead and working on new technologies to increase demand. That means it intends to accelerate the development of more hybrid-electric vehicles. And that may include pickups and there continues to be some demand for pickups in the U.S.
Toyota says that 70 percent of the pickup truck market in the U.S. consists of people who need their truck for work or for towing needs. So Toyota intends to service that segment of the market and provide hybrid trucks that offer decent towing. Trucks like its A-BAT hybrid truck concept which was unveiled this year.
Our take? So, were the Big Three wrong to concentrate on trucks? Is Toyota any better than the Detroit Three? Well, yes and no.
via Wards Auto
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